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Orr delays freezing pensions as mediation continues

An emergency order signed last week by Detroit Emergency Manager Kevyn Orr freezing accrued benefits and preventing new employees from joining the city's General Retirement System will be temporarily suspended, Orr's office announced Monday afternoon.

The order, which was signed last Monday and hasn't been posted on the city's website or sent to the media, is being suspended as negotiations in federal bankrupty court continue.

Orr reserved the right to reinstate the order retroactive to Jan. 1, according to a press release, if mediation is not successful.

"The City remains in a financial emergency, and to the extent that mediation can assist in finding a way to improve services for all of its 700,000 residents, then it is worth continuing," Orr said."But time is running short..."

The GRS, which covers nonuniform city employees and retirees, is one of two city pension funds that Orr estimates are at least $3.5 billion underfunded. The city, which filed for bankruptcy in July, has at least $18 billion in debts and pension and health care obligations, according to Orr.

Current retirees will continue to receive their pensions.

The city has about 22,000 retirees in the GRS and the Police and Fire Retirement System.